Cable Cutter

A short-range wireless technology with an oddball name could free you from tangles of cables for good. More than 2,000 high-tech companies -- from Intel and Motorola to a crop of start-ups -- have joined forces to support "Bluetooth." The low-power technology will let laptops, cell phones, printers, handheld computers, and other devices "talk" over a distance of about 30 feet. Named for the 10th-century Nordic king who unified Denmark and Norway, Bluetooth could save small businesses time and hassle when they, say, settle into new digs or need to do E-mail on the run.

Bluetooth amounts to a postage-stamp-sized radio chip that's installed in a product, and it's expected to be widely deployed in devices such as cell phones and headsets by 2002. "None of these devices really have the ability to talk with one another. They need a common language," says Simon Ellis, an Intel marketing manager and Bluetooth Special Interest Group (SIG) marketing director. Bluetooth is designed to provide just such a dialect.

What does that mean for you? A start-up could use Bluetooth chips to create a short-range wireless computer network without pulling up flooring to wire the new offices. Colleagues could meet informally around a table and zap one another data files without schlepping cables to the meeting. And on-the-go executives could finally be able to match up phone numbers, dates, and other data stored on their laptops, cell phones, and handheld organizers.

With a Bluetooth chip in them, cell phones could serve as modems for wireless Internet access. No more having to find the right cable to link the laptop to the phone. Instead, the cell phone could sit in your briefcase while you send and retrieve E-mail. One more option: office workers could get wireless entry to the Internet -- at DSL-like speed -- by using a special Bluetooth "access point" that acts like a server and provides a gateway to the public phone network.

Bluetooth technology was born in 1994 at Ericsson, the Swedish cell-phone maker. In 1998, Ericsson partnered with Nokia, IBM, Toshiba, and Intel to form Bluetooth SIG, which helped foster a global Bluetooth standard. More than 2,000 companies have since agreed to develop Bluetooth products and software. The wireless technology differs from that of traditional cell phones, for example, in that it transmits over much shorter distances and emits far less radiation.

The introduction of products that use Bluetooth technology may be slow, because currently there is no standard to ensure that those devices can talk to one another.

But Bluetooth isn't perfect. Like other complex technologies, it's hitting the market later than was expected -- more than a year and a half behind schedule. And security is less than fail-safe: a device using Bluetooth isn't immune to interlopers. Researchers at Lucent Technologies recently uncovered flaws that could allow eavesdroppers to read E-mail transmissions, for example, or possibly even determine a Bluetooth user's identity. But Paul Kan, the Bluetooth strategic marketing manager for the microelectrics group at Lucent, says those flaws can be solved "quickly" and doubts they will have much of an effect on when Bluetooth products will be deployed.

Airwave traffic jams are an issue, too. Bluetooth operates in the 2.4GHz frequency band -- the same portion of the radio spectrum used by cordless phones, remote-control garage openers, and the wireless local networks that already exist in some offices and homes. Airwave congestion could disrupt some data and voice traffic, but the average Bluetooth user wouldn't experience those hiccups, says analyst Sarah Kim of the Yankee Group.

Kim also says the introduction of Bluetooth products could be slow because there isn't a simple system to ensure that all of the devices will talk to one another. "If Bluetooth can get over those and other hurdles, it could be a big success," says Kim.

Among the first products will be special cards that slide into PCs to make them "Bluetooth enabled." IBM plans to sell its PC cards for $189. Wireless cell-phone headsets are another niche for the technology. Ericsson expects its headsets to cost about $500. Bluetooth cell phones are also expected to hit the market.

Gadget freaks will likely be the early adopters. Cahners In-Stat Group expects that the number of Bluetooth devices eventually will explode, hitting 1.4 billion units shipped by 2005. The research company predicts consumers will use Bluetooth to wirelessly access the Internet, to print documents from different rooms without needing a full-blown home network, and to synchronize personal data stored in separate electronic devices.

Analysts predict that the number of Bluetooth devices will hit 1.4 billion by 2005.

That could mean profitable opportunities. "Bluetooth is going to enable a plethora of small businesses to start," predicts Tony Kobrinetz, a Motorola vice-president. Already, Jeff and Mary Beth Griffin have started a Charlotte, N.C., company, BlueLinx Inc., that's using Bluetooth technology to create "quiet zones" where beeping cell phones and pagers won't shatter the peace. The couple -- who were inspired to start their business by a ringing cell phone in church -- are targeting restaurants, theaters, and other establishments. Their Q-Zone technology cuts the volume on wireless devices or switches them to vibration mode when the devices enter specific areas.

Industry executives can even see a day when a customer armed with a handheld computer will be able go to the mall and notify nearby shops that he or she needs, say, oversize shoes. A store's computer could receive that electronic alert and beep the customer's device to indicate that the shoes are available. By then, maybe cables will be history, as outdated as rabbit ears on a black-and-white TV.

If Larry Bodony and Paul St. Pierre achieve their dream, your wallet will become a wireless device for surfing the Internet, as well as a personal ATM. How? Bluetooth.

The duo cofounded a Boston-area start-up called WearLogic. Their SmartWear wallet, which is due out by year-end, boasts a keyboard and a display screen and stores phone numbers, dates, and other personal data, much like a handheld organizer. "Smart card" users can whip out the wallet to check electronic cash balances and view recent transactions. Looking ahead, Bodony, 42, and St. Pierre, 48, plan to use Bluetooth to make their smart wallet, well, even smarter.

They see their wallet as a perfect companion for a cell phone. With it users could download money into their smart card, pay bills, or shop. So Bluetooth seemed like a natural fit. "Your wallet doesn't have a wire on it, does it?" asks St. Pierre, who admits that the challenges of the technology are complex. "How do I tell my wallet to speak only to my cell phone and not to every other one in range?"

Bodony and St. Pierre met in the early 1990s at a Massachusetts company that makes digital editing systems. They quit in 1996 and went their separate ways: Bodony headed to a U.S. affiliate of a Japanese electronics company, where he built technology for reading smart cards; and St. Pierre accepted an engineering post at a software company.

The Asian financial crisis reunited them in 1998. After his Japanese employer shut its research division, Bodony was unemployed. But he walked away with valuable knowledge about smart wallets, a product that his former employer had looked into but hadn't developed. Bodony called St. Pierre to pitch his idea for an electronic wallet. They discussed it over beer and buffalo wings, and St. Pierre decided to quit his job and join Bodony. He felt that he was getting old, "and the high-tech business doesn't look kindly on old folks. I figured if I was going to take the plunge, I'd better do it now."

Soon WearLogic was born. After raising cash, Bodony and St. Pierre set off to develop a prototype wallet. They rented a tiny office near a Chinese restaurant and, steeped in the aroma of greasy pupu platters, debugged hardware and software. Today Wakefield-based WearLogic has about a dozen employees. Bodony is CEO, and St. Pierre is vice-president of engineering. The partners secured their first round of venture funding in January after having run so low on money that they temporarily stopped taking salaries and their employees began looking for other work.

WearLogic has patents and trademarks for other clothing articles, like jackets, that could become wearable computers. The price for the initial smart wallet is targeted at about $300. The Bluetooth wallets are scheduled to be available by mid-2001 but don't yet have a price. "It's definitely something to keep your eye on," says Yankee Group analyst Sarah Kim.

Face to Face

It's Going to Be Huge

Chunka Mui is a partner with Chicago consulting firm Diamond Technology Partners and is coauthor of the book Unleashing the Killer App: Digital Strategies for Market Dominance. Inc. asked him about the impact Bluetooth is expected to have.

Inc.: What's significant about Bluetooth?

Mui: The most fascinating thing for me is the idea of having devices talk to each other in a fairly simple way. It's unbridled connectivity. And what that does is lay an infrastructure for a tremendous amount of innovation in terms of devices and communication.

Inc.: Can you think of a similar global technology standard?

Mui: The Internet Protocol, on which the Internet is based. Just look at the innovation that was permitted to spread around the Internet. So what the Internet did for PCs, Bluetooth can do for all devices.

Inc.: Can you envision that Bluetooth will cause disruptions for businesses?

Mui: Huge disruptions all over the place. You can imagine that the number of ways you connect with your customers will grow maybe a thousandfold. Instead of communicating with you face-to-face or over a phone or using their PC, they can do it from almost any device they're carrying. You won't know where your customers are talking to you from anymore. They could be at home. They could be at the office. They could be at your store. They could be in your competitor's store. They could choose to interact with you using their handheld computer because they can't get to the front of the line.

Inc.: What's the importance of that?

Mui: You have to be able to respond to all that. You have to have the information instantly available to answer the query or the request. Then you have to be able to differentiate among the ways they're interacting with you, because their expectations will be different.

Inc.: How quickly do you see this happening because of Bluetooth? Will it make inroads as quickly as the Internet did?

Mui: It's going to be faster, because it has the Internet to build on.